The first quarter of 2025 has already proven to be eventful in the state benefits law landscape, as the Trump Administration ushered in a series of executive orders dominating headlines in both the abortion and gender-affirming care spaces.
While directed at federal agencies, the orders signal a shift in the administration’s opinions that may trickle down to states through agency guidance, court rulings based in part on administrative opinions and conflicts between federal executive orders and existing state law. Litigation continues in many states on both topics, though proceedings in many suits are stayed, pending the outcome of a high-profile gender-affirming care case currently before the U.S. Supreme Court. This alert also includes an overview of other pressing state news updates and benefit issues from the past quarter, including new rulemaking for existing state programs.
Executive Summary
Regarding abortion and reproductive health care:
Executive orders were issued on abortion and reproductive care services, directing federal agencies to take action consistent with the new administration’s position.
State litigation continues to trend toward extraterritorial application of state laws, including challenges to Idaho and Tennessee abortion trafficking laws and out-of-state referrals for abortions in Idaho, as well as civil and criminal indictments from Louisiana and Texas against a New York doctor for providing abortion services and prescription via telehealth.
State laws prohibiting abortion and abortion medication in Wyoming were overturned.
Arizona and Missouri blocked enforcement of existing state bans after voter amendments enshrined rights to abortion until viability in both states.
Idaho’s largest health system filed a lawsuit seeking emergency abortion protections under the Emergency Medical Treatment & Labor Act (EMTALA) aiming to continue the legal challenge in the wake of the administration’s motion to vacate its original lawsuit challenging Idaho’s ban under EMTALA.
Several states rolled back abortion reporting requirements.
On gender-affirming care issues:
President Trump signed executive orders on gender-affirming care and transgender services, directing federal agencies to take action consistent with the new administration’s position.
Private plaintiffs and states responded quickly with lawsuits challenging the orders. Two courts have issued restraining orders on the executive order freezing federal funding.
Over a dozen state attorneys general issued directives to continue providing gender-affirming care in accordance with state nondiscrimination laws and coverage mandates.
The U.S. Supreme Court’s ruling in the high-profile Skrmetti case is still pending; meanwhile, the Trump Administration sent a letter to the court announcing that it no longer holds the opinion of the Biden Administration that the state laws underlying the lawsuit are unconstitutional.
Kansas passed its first gender-affirming care law, which bans puberty blockers, hormone therapy and surgeries for minors to transition from their gender assigned at birth.
Litigation is stayed in many states while we await the Skrmetti ruling, however some states have moved forward: a federal appeals court in Indiana kept its gender-affirming care ban in effect pending further litigation; a Missouri circuit court upheld its state ban in a lawsuit brought by transgender children and their parents; the Montana Supreme court blocked its state ban from enforcement while litigation continues in a lower court; and Oregon issued rulemaking related to a previous coverage mandate requiring medically necessary gender-affirming treatments.
California’s Transgender, Gender-Diverse and Intersex (TGI) Act requires compliance with provider directory updates and cultural competency training rules by March 2025.
Additional updates to state laws and programs impacting employee health and welfare benefits this quarter included updates to flat amount monthly penalties in California and Washington, D.C. for individuals failing to maintain minimum essential coverage and new rulemaking related to out-of-state participants in the Washington Cares Fund long-term care insurance program.
NOTE: Self-funded ERISA plans are generally not impacted by state insurance laws and, therefore, no immediate action is required from employers on the information discussed below. We nevertheless recommend that employers review current benefits in conjunction with state mandates to ensure that plan offerings keep pace with market changes and continue to meet enrollee needs and expectations.
ABORTION AND REPRODUCTIVE CARE
Executive Orders Relating to Abortion and Reproductive Care
The Trump Administration issued a flood of new executive orders in early 2025, several of which related to abortion and reproductive care services. One order, Enforcing the Hyde Amendment (Jan. 24, 2025), revokes two previous executive orders issued by the Biden Administration that supported and promoted information and access to abortion care where it remained available after the Dobbsruling, including across state lines and through non-discrimination provisions. The order also states that it will ensure the enforcement of the Hyde Amendment, a legislative provision dating back to the 1980s that prohibits the use of federal funds for abortion services. Another order, Memorandum for the Secretary of State, the Secretary of Defense, the Secretary of Health and Human Services, the Administrator of the United States for International Development/The Mexico City Policy (Jan. 24, 2025) revokes another Biden Administration order and reinstates an older order from 2017 (The Mexico City Policy). Also known as the Global Gag Rule, the Mexico City Policy prohibits international non-governmental organizations (NGOs) that receive U.S. government funds from engaging in work around the provision of abortion care (including abortion services as well as information, counseling, referrals or advocacy), even with private, non-U.S. funds.
Lockton comment: Executive orders are directives to federal agencies to undertake certain actions to enforce the positions outlined in the order, but they cannot override federal laws, statutes, or binding case law. Consequently, the orders do not automatically change any state laws currently in place unless and until new guidance is proposed and approved through typical administrative processes. While we anticipate seeing new rulemaking on these orders in the future, employers do not need to implement any changes related to abortion or reproductive care services at this time due to these orders.
Out-of-State Abortion Care a Hot Litigation Topic
State Abortion Trafficking Laws Challenged in Court
In a first-of-its-kind law, Idaho banned abortion trafficking in 2023. This prohibited anyone from recruiting, harboring or transporting a minor with the intention of helping the minor get an abortion and conceal it from parents or guardians, even if obtained in a state where the procedure is legal. The law was challenged in court, and on Dec. 2, 2024, a federal appeals court ruled that Idaho can enforce most of its law while the litigation continues. However, the court blocked the part of the law that prohibits “recruiting” a minor to get an abortion, which includes activities such as providing information about where to obtain an abortion or providing financial or logistical assistance, stating that the provision was overly broad.
In 2024, Tennessee implemented a law mimicking Idaho’s ban on abortion trafficking with nearly the same definitions, prohibiting an adult from intentionally recruiting, harboring or transporting a minor for the purpose of obtaining an abortion or abortion-inducing drug without consent from the minor’s parent or guardian. The Tennessee law was similarly challenged, and in September 2024, a federal judge blocked the law from being enforced while the case continues, ruling that the state cannot “make it a crime to communicate freely” about legal abortion options, even in a state with a full prohibition.
Idaho Court Rules on Out-of-State Abortion Referrals
In December 2024, the same federal appeals court hearing Idaho’s abortion trafficking suit (above) ruled in a separate case that Idaho’s attorney general could not rely on a state law that prohibits “assisting an abortion” to prosecute providers for referring patients for out-of-state abortions. The court held that such restrictions would violate medical professionals’ rights to free speech. The decision allows doctors in Idaho to advise patients seeking out-of-state care while litigation continues.
New York Provider Faces Out-of-State Criminal and Civil Charges for Telehealth Abortion Prescriptions
A New York doctor was indicted on charges of criminal abortion in Louisiana in late January for prescribing an abortion pill to a teenage patient through a telehealth visit. The same New York provider faces civil charges brought by the Texas attorney general, alleging that she prescribed and provided abortion medication to a Texas patient via telemedicine. In February 2025, New York’s governor announced that she rejected a request from Louisiana to extradite the doctor to the state for prosecution.
Lockton comment: Much recent abortion litigation centers on extraterritorial concerns, including out-of-state care referrals, telehealth services or prescriptions to patients in states with prohibitions, and the first instances of providers facing out-of-state indictments for providing such care. These cases will be a test of states’ power to prosecute out-of-state providers, as well as state shield laws aiming to protect providers from such prosecution and, more pointedly for plan sponsors, which state laws will apply in these cross-border legal challenges.
Other Updates to State Abortion Laws
Wyoming Strikes Down State Ban
Two Wyoming laws, one prohibiting abortion and the other prohibiting pill-induced abortions, were under preliminary injunction as of March 2023. A district court ruled on both laws in November 2024, holding that the prohibitions were unconstitutional and permanently blocked both from enforcement. An appeal has been filed, but the ruling allows abortions to be performed up to viability while the appeal continues.
Initial Steps Taken to Resolve Ballot Amendments in Conflict with State Laws
Arizona providers have filed a lawsuit challenging the state’s existing 15-week ban after state voters approved a constitutional amendment in November enshrining the right to abortion until viability. The state Attorney General pledged to not enforce the state’s current 15-week ban while litigation continues.
A Missouri court in December similarly blocked enforcement of the state’s current total ban while the underlying lawsuit challenging the ban continues in court. Voters in Missouri also enshrined the right to abortion until viability in the state constitution last November.
EMTALA Drama Continues in Idaho
In the ongoing saga of litigation over EMTALA and state abortion laws, Idaho’s largest health system has now sued the state attorney general seeking emergency abortion protections. The suit, filed by St. Luke’s Health System, LTD. in January 2025, requests a declaratory judgment from a federal court that Idaho’s near-total abortion ban is partly preempted by the federal EMTALA law and seeks a permanent injunction. Idaho’s abortion ban is temporarily blocked to the extent it conflicts with EMTALA after a series of court decisions last year, including a U.S. Supreme Court ruling, stemming from a Biden Administration lawsuit. Citing concerns that the new administration would seek to vacate the injunction and dismiss the complaint entirely, St. Luke’s filed its own suit to avoid leaving the status of abortions as emergency stabilizing care once again in a gray area of legality. The Biden Administration’s federal suit was officially dropped in early March, as expected. Meanwhile, the St. Luke’s suit has moved forward and secured a temporary inunction against the state’s abortion ban, preserving access to emergency abortions under EMTALA regulations for now while the case continues.
Lockton comment: We anticipate continued litigation over reproductive care and abortion laws in light of the administration change, forthcoming rulemaking pursuant to the executive orders and the ongoing struggle to pin down the applicability of state laws prohibiting abortion services to other states’ regulations. Lockton will provide updates on these topics to clients in our State-by-State Guide to Abortion Laws when available.
States Roll Back Abortion Reporting Requirements Over Privacy Concerns
Finally, citing patient privacy concerns, Arizona’s governor has called for legislators to repeal a state law that requires an annual abortion report amidst other states’ similar measures. Reports, which became mandatory in Arizona in 2010, collect detailed information on abortions, including the reason for seeking an abortion, patient demographics such as age, race, and ethnicity, information about previous pregnancies, and when during the pregnancy an abortion occurs, but do not include patient’s identifying information such as name, date of birth, or social security number.
As of February 2025, 46 states and Washington D.C. require some form of mandated abortion reporting, though not all requirements are as intensive as Arizona’s. Several other states have also moved toward reduced reporting requirements due to privacy issues as well as administrative burdens on providers collecting the data, including:
Michigan: not collecting data at all going forward;
Illinois: switched to aggregate reporting instead of individual abortion data;
Minnesota: reduced the number of questions and data reported;
New York: reduced patient demographic questions.
GENDER-AFFIRMING CARE AND TRANSGENDER BENEFITS
Executive Orders Relating to Gender-Affirming Care
Like abortion, gender-affirming care was a hot topic for the new administration in the early weeks of the year, with several executive orders and many others rescinded from previous administrations.
Protecting Children from Chemical and Surgical Mutilation (Jan. 28, 2025)
This order states that the federal government will not “fund, sponsor, promote, assist, or support” gender-affirming care for minors under age 19, including puberty blockers, hormones, and surgeries. It directs the Secretary of the U.S. Department of Health and Human Services (HHS) to take actions to end such care, which it stipulates may involve Medicaid/Medicare conditions of participation, Section 1557 of the Affordable Care Act (ACA), and essential health benefit requirements, among others.
Pursuant to this order, on Feb. 20, 2025 HHS rescinded previous guidance relating to both the privacy of gender-affirming care data and also to minors’ access to care without discrimination under federal Section 1557 rules under the ACA. The rescinded order, issued in 2022, reiterated that HIPAA prohibited regulated entities from disclosing protected health information (PHI) related to gender-affirming physical or mental health care in most circumstances. The recission notice from February 2025 confirms that the previous guidance “no longer represents the views or policies” of the administration and suggests that the HIPAA protections noted in the 2022 guidance “lacks adequate legal basis under federal privacy laws.”
Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government (Jan. 20, 2025)
This order outlines that the federal government will only recognize two sexes, male and female, and directs a variety of federal agencies to “enforce all sex-protective laws to promote this reality” and update policies and procedures accordingly. The order provides a number of definitions and states that “sex” is not a synonym for and does not include the concept of “gender identity.”
Rescinded Orders
In addition to the newly issued orders, the administration rescinded several previous orders, including guidance extending the protections under ACA Section 1557) against discrimination based on gender identity. It also rescinded a Department of Justice (DOJ) memo stating that the DOJ would apply the U.S. Supreme Court’s Bostock decision, which held that sex-based discrimination includes discrimination based on sexual orientation and gender identity, in the context of Title IX and Section 1557.
White House Fact Sheet Released After Executive Orders Issued
Days after the Protecting Children from Chemical and Surgical Mutilation order was issued, the White House released a press release stating that the order was already having its intended effect and pointed to actions taken by providers to downsize or eliminate such care for minors in New York, Colorado, Virginia, Washington, D.C., Illinois, and Pennsylvania (all states with protective laws in place or no restrictions on care).
Lockton comment: As mentioned above, executive orders direct federal agencies to undertake certain actions, but they do not override or change existing laws at either a federal or state level. However, we want to highlight these orders to bring awareness to potential downstream impacts to the benefits landscape. As many states’ laws are still in flux with pending litigation on gender-affirming care prohibitions, we anticipate we will continue to see many legal battles in these spaces as federal agencies revise policies, procedures and interpretations of previous guidance.
In the meantime, any changes to gender-affirming care services or how PHI related to gender-affirming care is handled or distributed should be cautiously reviewed with legal counsel under HIPAA reproductive privacy rules and 1557 at a minimum.
State Responses to Executive Orders
A flurry of lawsuits have surfaced in the days since the orders were issued. In response to the order Protecting Children from Chemical and Surgical Mutilation, the following actions have been taken:
A suit filed by 22 state attorneys alleging that the executive order directing a funding freeze on gender-affirming care for minors is unconstitutional. On Jan. 31, a federal judge in Maryland issued a nationwide temporary restraining order to halt the administration’s attempt to freeze federal funding, agreeing that it is likely a violation of the Constitution. The temporary restraining order was extended into a full preliminary injunction on Feb. 13, thereby blocking enforcement of the order while legal proceedings continue.
A lawsuit brought by the ACLU and Lambda Legal, along with several private plaintiffs, seeking to block the order from taking effect. A group of 18 attorneys general subsequently filed an amicus brief supporting the plaintiffs in their suit against the Trump Administration in February 2025.
A multistate lawsuit filed in Washington by its attorney general challenging the constitutionality of the order and seeking to block federal agencies from acting on the order’s directives. On Feb. 14, a Washington judge issued a temporary restraining order on the directives in the order much like the Maryland court; two weeks later, the same judge converted the temporary restraining order into a preliminary injunction that will remain in effect until the trial. In issuing the injunction, the court said that the states are likely to succeed on the merits because the executive orders overstep the authority of Congress to appropriate funds under the separation of powers doctrine and because the orders likely violate the equal protection clause by discriminating against minors and transgender people. This restraining order applies to Washington, Oregon, and Minnesota, the three states that brought the suit, and Colorado, which later joined the original filing states.
A complaint filed by Doctors for America, a medical advocacy group, alleging that the administration has removed critical healthcare websites, including those related to HIV spread prevention and adolescent mental health, after the order directed agencies to remove information about “gender ideology.”
Over a dozen states reiterated that they will continue to follow state laws and issued guidance to providers to continue providing gender-affirming care. Following the restraining order issued by a federal court in Maryland, New York’s attorney general sent a letter to providers reminding them that to comply with New York nondiscrimination laws, they must continue to provide health care services (including gender-affirming care) to transgender or gender nonconforming individuals regardless of federal funding. The letter also said that the federal temporary restraining order issued in January applies to current and future grants of federal assistance, and that funding cannot be frozen or withdrawn relating to gender-affirming care for minors.
Additionally, 14 attorneys general led by the Rhode Island attorney general issued a joint statement on Feb. 5, 2025 affirming their commitment to protecting access to gender-affirming care and reminded providers that a federal court had directed the federal government to resume funding that had been frozen by the order. The statement also says that the states will continue to enforce state laws that provide access to gender-affirming care and will challenge further efforts to restrict access within their jurisdictions.
Lockton comment: The executive orders issued on gender-affirming care are inconsistent with some state laws and many states have promptly responded with their own directives to continue providing gender-affirming care under state law requirements. Providers and insurers should carefully weigh the risks of modifying any current coverage or care offerings considering the new orders and potential future rulemaking against possible noncompliance with state nondiscrimination provisions or protections on care.
Administration Switches Position in U.S. Supreme Court Gender-Affirming Care Case
While the nation awaits a ruling from the U.S. Supreme Court in a high-profile gender-affirming care case (U.S. v. Skrmetti), the Deputy Solicitor General sent a letter to the court in early February stating that the Justice Department no longer adheres to the Biden Administration’s position that the Tennessee law underlying the lawsuit violates the U.S. Constitution’s equal protection guarantee. At issue in the case is a Tennessee law that prohibits medical practitioners from providing gender-affirming puberty blockers, hormones, or surgery for the purposes of “enabling the minor to identify with, or live as, a purported identity different than the minor’s sex; or treating purported discomfort or distress from discordance between a minor’s sex and asserted identity.” The same treatments are permitted for treating minors whose gender identity matches their sex assigned at birth. Oral arguments were held in the case on Dec. 4, 2024, and a ruling is expected by June 2025.
Lockton comment: Many states have stayed proceedings in ongoing gender-affirming care litigation pending the outcome of the Skrmetti case, so we expect a domino effect leading to the resolution of many pending lawsuits throughout the remainder of the year once the ruling is issued.
Other Updates to State Gender-Affirming Care Laws
Kansas Passes, Vetoes, then Overrides Veto on New Law Prohibiting Gender-Affirming Care for Minors
The Kansas legislature passed SB 63 in early February, which prohibits gender-affirming care for minors and restricts the use of state funds regarding the promotion of gender transition. The bill was vetoed by the state governor, but the veto was quickly overridden by the legislature. As a result, the new state ban, which prohibits puberty blockers, hormone therapies or surgery for a minor to transition from their gender assigned at birth is in effect as of Feb. 18. 2025.
Indiana Prohibition Remains in Effect After Court Ruling
A federal appeals court allowed Indiana’s gender-affirming care ban to remain in effect pending further litigation in the district court. The ruling, issued in November 2024, affirmed the court’s ruling from February 2024 lifting an injunction on the state prohibition while it reviewed the underlying suit. The case has been sent back to the district court for further proceedings consistent with the court’s decision.
Missouri Upholds State Prohibition on Gender-Affirming Care
A Missouri circuit court upheld a state law banning gender-affirming care for minors in November 2024, holding that the lawsuit brought by a group of transgender children and their parents did not meet any of the criteria required to block enforcement of the law and that the prohibition is constitutional.
Montana Blocks State Ban While Case Continues
The Montana Supreme Court ruled in December 2024 that a district court’s temporary injunction of the state ban on gender-affirming care for minors was proper and that the case will proceed to trial in the district court. As a result of the ruling, minors will be able to access medical treatments providing gender-affirming care while the case continues to resolve the question of whether the ban is unconstitutional.
Oregon Issues Further Rulemaking in Gender-Affirming Care Coverage Mandate
Oregon’s Department of Consumer and Business Services (DCBS) issued a permanent administrative order to further implement HB 2022, which passed in 2023 and required fully insured plans to cover medically necessary gender-affirming treatment. The administrative order states that carriers offering a health benefit plan may not deny or limit coverage under the plan for gender-affirming treatment that is medically necessary and prescribed in accordance with accepted standards of care. The order further defines “accepted standards of care” and outlines additional requirements for adverse benefit determination reviews.
California TGI Inclusive Care Act Compliance Deadlines Coming up in 2025
Finally, California SB 923, the Transgender, Gender-Diverse and Intersex (TGI) Inclusive Care Act, requires fully insured healthcare service plans and health insurance to comply with requirements in 2025. Enacted in 2022, the Act (1) requires insured health plans to include information in its provider directory that identifies in-network providers that have affirmed that they offer gender-affirming services and (2) requires support staff to complete cultural competency training for the purpose of providing trans-inclusive healthcare for TGI individuals. These activities must be completed no later than March 1, 2025. Ongoing compliance requires training to be completed every two years and new hire training to be completed within 45 days of beginning employment.
The act also established the TGI Working Group to develop standards on cultural competency training as well as a training curriculum. The group provided recommendations and guidance on implementing the bill’s requirements. Formal regulations will be adopted pursuant to this guidance by July 1, 2027.
Lockton comment: Although further rulemaking is pending, we recommend that impacted plans proactively comply with cultural competency training requirements and provider directory updates under the bill’s requirements and further issued guidance. Note that while SB 923 does not provide an express exception for self-insured ERISA plans, we believe that ERISA would preempt these state laws.
OTHER BENEFIT-RELATED UPDATES
California
Pursuant to its individual health insurance mandate requirements, California released its calendar year (CY) 2024 flat-dollar amount monthly penalties for residents who fail to maintain minimum essential coverage (MEC) as defined under the ACA. Flat amount penalties for CY 2024 are $900 per adult and $450 per child.
Washington, D.C.
Also under its individual health insurance mandate coverage requirements, Washington, D.C. released its flat-dollar, per-person penalties for calendar year (CY) 2024, which are $795 per adult and $397.40 per child, or up to $2,385 per family.
Washington
Washington has implemented new rules related to the WA Cares Fund. On Feb. 14, 2025, Washington filed CR-103 (the final step in the state’s rule-making process) and adopted rules to implement a portion of Substitute HB 2467, which passed in the 2024 legislative session and allows individuals who relocate outside the state to continue participating in the WA Cares Fund. The proposed rules implement a portion of the bill defining “out-of-state participant” and add further program definitions, outline qualified individual requirements and determinations, and further align the WA Cares and Paid Family and Medical Leave appeals processes. These rules will be effective March 17, 2025.
Lockton comment: The new adopted rules do not change any facets of the program currently in place, including contributions made via payroll tax withholding.
Not legal advice: Nothing in this alert should be construed as legal advice. Lockton may not be considered your legal counsel, and communications with Lockton's Compliance Consulting group are not privileged under the attorney-client privilege.
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